By: Sara Patterson

In Asian trading today the Euro hit a 10-year low against the Japanese Yen, resulting from stop-loss selling in the EUR/JPY pair. And, although analysts expect the single currency to stay weak in the coming days, there was some happy news coming from the region, specifically from Italy, where the Italian Treasury was able to pay significantly less for borrowing money on a six-month term than it did last month.

Italy sold its expected 9 billion Euro of six-month treasury bills at an average yield of 3.251%, dramatically lower than the average yield of 6.504% that they received at November’s auction. The true test, however, will be during Italy’s sale of 10-year debt, which is scheduled for later on today. Italian 10-year government bonds are now yielding above 7 percent, which is about the threshold beyond which other European governments have been required to seek bailouts.

Euro Continues to Tumble

ECB data earlier this week showed that Eurozone banks deposited 452 billion euros with the central bank, a record that shows that the banks don’t quite trust each other. This use of the ECB deposit facility comes on the heels of a huge borrowing rush last week after the announcement of a new 3-year liquidity plan. This week’s ECB deposit of 412 billion Euros surpasses the previous record of 384 billion Euros in June of last year.

Analysts expect the common currency to remain weak in the coming days, a sentiment encouraged not only by distressing data from Europe, but also from the fact that the Euro dropped against the greenback to $1.2887, the lowest level in nearly a year.